Colleges offer microgrants to help low-income students pay bills that can derail them

Small financial woes thwart growing numbers who are painfully close to getting their degrees

Georgia State University, which offers “microgrants” to get low-income students over small financial hurdles so they can make it to graduation. Photo: Georgia State University

ATLANTA — During the summer between his sophomore and junior years at Georgia State University, life finally appeared to give Tyler Mulvenna a break.

Since his mother got laid off, Mulvenna was working up to 70 hours a week to help cover the mortgage and utilities, as well as transportation, food and textbooks — all while inching toward a degree in French with a concentration in international business. The soft-spoken 21-year-old had time for homework only on his three-hour daily bus commutes to and from the university, where he was striving to graduate within four years. Taking longer, after all, would only cost more.

Then, out of the blue, Mulvenna got a chance to live on campus. That would finally lower the stress, and let him focus more on being a student.

But there was a hitch: He only had $1,200 of the $3,000 needed for a semester’s rent.

The gap was bridged by Georgia State’s Panther Retention Grant, a program that offers small amounts of money, which it calls microgrants, to help financially struggling students stay in school and graduate.

The idea, being tried at a growing number of colleges and universities, is simple: For low-income students, many of them minorities or the first in their families to go to college, surprisingly small financial shortfalls are often all that stands between them and their goals, according to Tim Renick, vice president for enrollment management and student success at Georgia State. Microgrants ranging from several hundred dollars to $2,000 can get them to the finish line.

Without such help to low-income students, “there is no other way for them to continue.”

Stacey Moore, associate provost for student success and retention, University of Akron

Without such help, said Stacey Moore, associate provost for student success and retention at the University of Akron, “there is no other way for them to continue.”

The University of Akron has given grants averaging about $800 each to 1,000 students since 2013; of those, 65 percent who were on track to graduate managed to obtain degrees.

The number of undergraduates in need of lifelines like this began increasing sharply around the time of the economic downturn. Longer-lasting trends such as rising college costs and shrinking paychecks have also played a role.

The share of students receiving federal Pell Grants, which typically go to the children of families with incomes of $40,000 a year or less, is up from 25 percent to 38 percent since 2004, according to the Lumina Foundation, which advocates for increasing the proportion of the population with degrees, and is supporting several microgrant programs. (Lumina is among the funders of The Hechinger Report, which produced this story.)

During the same period, out-of-pocket expenses for low-income students also have increased. Nearly eight out of 10 low-income, first-generation students still come up short in their ability to pay for college, even after receiving financial aid, the Lumina study found.

“The number of students with unmet financial need is growing,” said Shari Garmise, vice president of the office of urban initiatives at the Urban-Serving University Coalition.

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The coalition is part of the Association of Public & Land-Grant Universities, or APLU, which is providing startup funding of $50,000 each to nine member schools to set up microgrant programs; the schools will have to raise the money for the grants themselves.

“Losing the chance to complete a degree … is a tragedy for students and for a society that increasingly needs skilled workers,” Garmise said.

It’s also expensive for colleges and universities that have to pay to replace every student who drops out. At public institutions, state budget allocations are increasingly being based on the proportion of students who actually graduate, rather than solely on the number who enroll.

And low-income, first-generation college-goers “are exactly the students everyone across the political spectrum agrees should be graduating more,” Renick said.

At Georgia State, the number of students eligible for Pell Grants has nearly doubled since 2007, from 1,617 to 2,742. Before 2011, some 1,000 per semester were being dropped from the rolls and unable to register for classes due to relatively small unpaid balances in their accounts.

The University of Akron has given microgrants averaging about $800 each to 1,000 students since 2013; of those, 65 percent who were on track to graduate managed to obtain degrees. Photo: University of Akron

Since then, microgrants have reached more than 6,000 students. Of those, 76 percent with fewer than 90 credits stayed in school, and 65 percent of those with more than 90 credits graduated, university officials said. Although most students received the grants once, some repeated.

The program costs $2 million a year, said Renick, “but it pays for itself” by saving Georgia State from having to replace students who leave. The University of Akron gives out about $200,000 a year in microgrants, and the return is more than three times that amount from students who stay and continue to pay tuition instead of dropping out, Moore said.

No one tracks how many students nationwide fail to graduate because of relatively small financial problems. But the 13 urban public research universities that applied to get some of the APLU’s seed money reported having a collective 47,000 seniors with unmet financial need, Garmise said.

Those huge numbers are helping to propel the microgrants approach. The Great Lakes Higher Education Guaranty Corporation has also given money to 31 universities and colleges in four states to launch microgrant programs after funding a three-year pilot program in Wisconsin technical colleges.

“At this point, [microgrants] have reached a point of recognition,” Garmise said. “The idea is spreading.”

Nearly eight out of 10 low-income, first-generation students come up short in their ability to pay for college, even after receiving financial aid

Students also benefit psychologically when they get help with unpaid bills, no matter how small, said Cedric Howard, vice chancellor for student enrollment services at the University of Washington, Tacoma, which also offers microgrants.

Freed from the burden of worrying so much about money, “Students aren’t as stressed about going to school,” said Howard. “It helps in building the construct of a college-going culture.”

Georgia State and the University of Akron both try to identify students with financial problems before they become too big to solve, and offer help before a crisis hits. Both also require students who receive the grants to undergo financial counseling.

“We’re not doing a good job educating students on financial aid,” Moore, at the University of Akron, said.

Mulvenna, meanwhile, said he now works a lot less and has more time both for his studies and to go out with friends for coffee, something he couldn’t do previously.

“I can do schoolwork and create friendships,” he said. “I finally have a little peace of mind.”

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